ELEMENTS OF A MARKET ANALYSIS
Defining trade areas is only a first step. The MARKET should segment special populations and consider the contributions of workers and visitors. Downloaded market reports are cheap but inaccurate, and only consider residents. A custom analysis uses verified, complete, local data, and measures all sources of demand.
SPENDING can be broken out by product line as well as type of store. Even if a new store can’t be supported, there is the potential for an existing one to add new merchandise to capture market potential.
SALES estimates should be based on an actual inventory of businesses and independent assessments of sales volume. The formula used to estimate sales at stores already in the district is one of the greatest sources of error in downloaded reports. The analysis should estimate existing sales in the district and the market share being captured. Downloaded reports estimate of sales for the entire trade area including businesses outside of the district.
While a gap analysis is interesting, it will not tell you what businesses your district can support. Retail and dining businesses make their decision based on the market potential and COMPETITION in the marketplace. The analysis should document and assess all competitors to understand opportunities and vulnerabilities for both the district and its businesses. It should identify competitive advantages and recommend positioning for new and existing businesses to capture increased sales.
The market analysis should result in solid guidance concerning the, number, supportable floor area, and characteristics of RETAIL AND DINING BUSINESSES that can be viable within the district.
Information gathered through the market analysis should be used to guide decisions about DESIGN, DEVELOPMENT, BUSINESS RECRUITMENT, and MARKETING for the district and its businesses. These decisions are driven by customer demand and desires to create the most appealing environment for them to shop, dine, seek entertainment, and participate in the community.
How well do
you - or your
customers? Data collected from
sensors, mobile phones, and other means is essential
Any business district
or retail development
plan needs to include
strategies for ongoing data collection and utilization.